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September 23, 2020

5 CAs association represent FM for ITR, Tax Audit and New TCS date extension

by facelesscompliance in Income Tax Circular Notification

5 CAs association represent FM for ITR, Tax Audit and New TCS date extension

The representation was made by Lucknow Chartered Accountants Society, Bombay Chartered Accountants’ Society, Chartered Accountants Association Ahmedabad, Chartered Accountants Association, Surat and Karnataka State Chartered Accountants Association

Highlights

The Covid-19 outbreak has shaken the world and uprooted normalcy everywhere. A new normal has emerged, which includes some compromises, lot of lifestyle changes and economic difficulties. Till now, the Government has been extremely proactive in taking various measures to help the economy deal with this situation.

CAs sincerely appreciate the efforts by the Government in this regard especially the recently introduced Taxation and other Laws (Relaxation and amendment of certain provisions) Bill 2020.


In the letter, CAs wish to bring to your kind notice some measures and relaxations that can be taken up under the Income Tax Act, 1961 which will save the taxpayers from undue and unintended hardship. Our recommendations cover various provisions of the law and have been bifurcated into suitable subjects for ease of reference

Extension of timelines for filing of returns under section 139(1) of the
Act

Considering all difficulties, it is recommended that the due date for filing of returns for all the taxpayers for A.Y. 2020-21 be extended to 31st March, 2021 and the due date for filing the tax audit report also be extended to 28th February, 2021.


Consequently, the timeline for filing all the reports and certificates under the Act which fall due alongwith or in connection with the ITR filing due dates may also be extended to 31st March, 2021.


This will also mean taxpayers availing moratorium will get an extended time for payment of interest and claiming the deduction u/s 43B of the Act in AY 2020-21.

There is no justification to distinguish those having self-assessment tax above Rs.1,00,000 and those having below that. It is an unfair distinction that has been cast and that too in unprecedented times. Therefore, it is recommended that such interest u/s 234A be not levied and the second proviso be suitably amended to align the date of charging the interest u/s 234A to the due date of filing of income tax return.

Request for granting relief from provisions of Tax Collection at Source (TCS) under section 206C(1H) of the Income Tax Act, 1961

Request for granting relief from provisions of Tax Collection at Source (TCS)
under section 206C(1H) of the Income Tax Act, 1961

CAs humbly pray for relief from the rigors of section 206C(1H)
of the Act by way of following mean

a) The provisions of section 206C(9) of the Act may be suitably amended to allow persons covered under section 206C(1H) of the Act to apply to the assessing officer for Nil/ Lower Tax collection at source certificate. It would be only judicious to request that persons covered under sub-sections (1F) and (1G) of section 206C may also be covered under section 206C(9) of the Act. As an alternative, suitable amendments may also be made in section 206C to provide that, no collection of tax shall be made in case of buyers who furnish necessary declaration form similar to the form as referred in sub-section (1A) to the seller.


(b) B2B transactions may be carved out from the ambit of TCS provision under section 206C(1H) of the Act as it would lead to multiple level of tax collection.


(c) As a one-point measure, it may be clarified that TCS obligation under section 206C(1H) of the Act would apply only for sales made after 30.09.2020. Receipt of sale consideration against sales made till 30.09.2020 would not attract provisions of section 206C(1H) of the Act.


(d) Suitable clarification be provided that the sweep of section of 206C(1H) would have no application on the transactions of sale involving integrated supply of both goods and service to the buyer. This is typically works contract service involving supply of both goods and services as singly transaction of sale.


(e) Suitable clarification be provided that the sweep of section 206C(1H) would have no application in the instances where receipt of sale consideration is not in the form of actual receipt of payment but it is merely a receipt through book adjustment.

f) In view of present unprecedented situation arising out of Covid-19 and the necessity of relaxations as mentioned above, it is respectfully prayed that the applicability of provisions of sections 206C(1F) and (1H) may be extended and made applicable w.e.f. 01.04.2021.


(g) A suitable clarification may be issued to the effect that for the purpose of TCS, the GST should not be included in the sale consideration.

The representation was made by Lucknow Chartered Accountants Society, Bombay Chartered Accountants’ Society, Chartered Accountants Association Ahmedabad, Chartered Accountants Association, Surat and Karnataka State Chartered Accountants Association

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